To evaluate the efficacy of the pneumococcal vaccine in the institutionalized elderly, we designed a nonrandomized trial. we are following 998 patients institutionalized prior to the trial and 546 new admissions for two to three years depending on when they entered the study population. In the first year vaccinees experienced 750.9 patient-years at risk and nonvaccinees experienced 241.8 patient-year at risk. the overall rate of radiographically confirmed pneumonia was 257.6 cases per 1,000 patient-years, of which two-thirds were in the vaccinees and one-third were in the controls. The rates of total cases of pneumococcal pneumonia, definite and putative pneumonia, pneumococcal bacteremia, and pneumococcal pneumonia-associated deaths per 1,000 patient-years at risk for vaccinees were 37.3, 4.0. and 12.0, respectively and did not differ significantly from the rates for nonvaccinees. We estimated the efficacy of the vaccine-type pneumococcal pneumonia was 35 percent for vaccinees (8.0) in relation to that in nonvaccinees (12.4). Nonvaccine pneumococcal types were isolated from five of six patients with definite pneumococcal pneumonia and from 20 of 30 patients with putative pneumococcal pneumonia. Preliminary evaluation of the institutional-acquired pneumonias occurred during the second year post-vaccination indicates similar findings. Although this study has methodological limitations, the preliminary results suggests that the current pneumococcal vaccine probably will not have a major affect in reducing the number of total cases of pneumonia or pneumococcal pneumonia in this target population. If additional cases and a longer period of surveillance confirm that the majority of pneumococcal pneumonias in the institutionalized elderly following pneumococcal vaccine are caused by serotypes not represented in the vaccine, then perhaps a second vaccine with more appropriate serotypes should be considered for this high-risk population.